Mike Ashley comments on troubled retail industry as Sport Direct posts loss

Source: Exec Digital UK

Date :20/12/2007 09:39:33

The founder of Sports Direct, blames the troubled state of the UK retail group on “three train wrecks”, criticises the sports retailer's broker Merrill Lynch and labels retail analyst ‘moron.'

Mr Ashley likened the difficult retail environment to a multiple "train wreck", saying that unseasonal summer weather, England failing to reach the European football championships and slow Christmas trading were behind the recent poor performance.

"There have been three train wrecks. I have a broken arm, a broken nose and a broken leg but I am going to get on that train and get to the destination," he said.

Mr Ashley also criticised Merrill Lynch - the bank that brought Sports Direct to market this year - for not preparing him for life as a public company and said the company had never intended to report like-for-like sales.

He also accused Philip Dorgan retail analyst at Panmure Gordon of being a “moron”, however he said the retailer was trading well given the circumstances.

First half loss

Mr. Ashley’s comments came as Sports Direct posted a 70 percent drop in first half pre-tax profit to £21.2 million. Sales fell by seven percent to £668.1 million. Net debt over the half grew to £796 million compared with just £38 million last year.

However shares in the retailer, which has lost more than two-thirds of its value since it listed, rose by 14 percent to 98.25 pence after it said it would exceed full-year earnings expectations.

Since its flotation in February, the company’s shares have been hit by profit warnings and criticism over corporate governance.

Privatisation

Mr Ashley said that he has "no current intention" of taking the company private, and added that Sports Direct still had a goal to become the world's most profitable sports group.

“I have no current intentions to take the company private and.?.?.?we have had discussions about putting a date of March 2009 [as a guarantee that it would not happen before that],” he said.

Sports Direct has major licensing deals with England replica shirt manufacturer Umbro, and also owns some of Britain's most popular sports brands including Slazenger, Dunlop and Kangol.

December 20, 2007